<PAGE>
[COVER]
-------------
THE
COLONIAL FUND
-------------
SEMIANNUAL REPORT
APRIL 30, 1995
GROWTH
AND INCOME FOR
CONSERVATIVE INVESTORS
<PAGE>
THE COLONIAL FUND HIGHLIGHTS
NOVEMBER 1, 1994 - APRIL 30, 1995
INVESTMENT OBJECTIVE: The Colonial Fund seeks primarily income and capital
appreciation and, secondarily, preservation of capital.
STRATEGY: The Fund pursues its objective by investing in common stocks that meet
certain quantitative value standards, indicating financial strength, high
intrinsic value, and consistent income.
DESIGNED TO OFFER:
- Solid long-term returns
- Protection in down markets
- Quarterly dividend income
- A broad range of investor services
PORTFOLIO MANAGER COMMENTS: "Interest rates gradually moved lower during the
first four months of 1995, stimulating stock market growth and spurring the
Standard & Poor's 500 Index to all-time highs. The Fund's portfolio of
value-oriented stocks fully participated in this rally."
THE COLONIAL FUND PERFORMANCE
<TABLE>
<CAPTION>
CLASS A CLASS B
<S> <C> <C>
Inception date 4/30/82* 5/5/92
Distributions declared per share $0.6075 $0.5788
Total return, assuming
reinvestment of all distributions
and no sales charge or CDSC
- - 6 months 8.83% 8.42%
- - 12 months 10.07% 9.14%
Net asset value per share at 4/30/95 $ 8.09 $ 8.08
</TABLE>
* Date Fund adopted current investment policies.
TOP TEN PORTFOLIO HOLDINGS
1. Lockheed Martin Corporation
2. American Brands, Inc.
3. Deere & Company
4. NYNEX Corporation
5. Textron, Inc.
6. J.C. Penney Company, Inc.
7. CIGNA Corporation
8. Cummins Engine Company, Inc.
9. Baxter International Inc.
10. Louisiana-Pacific Corporation
2
<PAGE>
PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
[PHOTO JOHN A. MCNEICE, JR.]
Investors benefited from favorable conditions in the stock market during the six
month period ended April 30, 1995. Despite concerns about inflation in the
United States through much of 1994, it appears that the Federal Reserve Board's
monetary policy has reduced growth and kept inflation under control. As a
result, the performance of U.S. stocks has continued to improve, despite a
decline in the value of the dollar. In fact, in recent months the United States
had one of the world's strongest stock markets. In contrast, Japan's economy has
been slowing, reflecting negative pressures from the unexpected strength of the
yen and the impact of the Kobe earthquake. However, many other foreign markets,
including those of Western Europe, have improved.
Colonial management believes that the current period of economic expansion in
the United States may have peaked. The outlook for the economy and stock market
remains positive, although the pace of growth may be more subdued. It is
management's view that continued stock market improvement reflects a consistent
level of confidence among U.S. equity investors.
Portfolio Manager Daniel Rie has been closely monitoring the markets and has
taken steps to provide investors with good relative returns. In the following
report, he reviews the performance of your Fund during the semiannual period and
provides insights about some of the Fund's investment opportunities.
Respectfully,
/s/ John A. McNeice, Jr.
John A. McNeice, Jr.
President
June 10, 1995
3
<PAGE>
PORTFOLIO MANAGEMENT REPORT
DANIEL RIE is Senior Vice President, Director of Equity Investments, and Lead
Portfolio Manager of The Colonial Fund. His credentials include a Ph.D. in
Finance and an undergraduate degree from the Massachusetts Institute of
Technology.
MATURING RECOVERY BENEFITS FUND: As the economic recovery matured, investor
sentiment shifted away from cyclical stocks, which typically perform well in the
early stages of a recovery, toward non-cyclical growth sectors, including
tobacco and pharmaceuticals. Although the Fund's strict investment criteria only
allow investments in value stocks, prices for portfolio holdings such as Micron
Technology improved so much that these stocks began displaying growth stock
characteristics.
DIVERSIFIED PORTFOLIO REDUCES RISK: The Fund invests in a diverse selection of
securities spread over many sectors and countries. We believe this strategy will
provide more consistent results over time than a strategy that makes large bets
in individual countries or sectors. At the end of the six-month period, your
Fund owned 188 securities in 9 economic sectors and 12 countries.
FOREIGN INVESTMENTS BOOST FUND PERFORMANCE: Many U.S. stocks suffered because of
the decline in value of the dollar. However, this problem was not reflected in
your Fund's performance. Approximately 12% of assets were invested in foreign
stocks, which tended to increase in value as the currencies of their respective
countries strengthened relative to the dollar.
TELEPHONE & TECHNOLOGY STOCKS ENHANCE RETURNS: Among U.S. investments, telephone
stocks made a significant contribution to performance as prospects for that
sector improved. Technology stocks also contributed to the Fund's total return.
In large measure, the recovery in these stocks was driven by an increase in
demand for semiconductors, which benefited the Fund's position in Intel, Micron
Technology, and Texas Instruments. The weakness of computer stocks created a
buying opportunity, and new investments were made in Apple Computer, Compaq
Computer, and Sun Microsystems. Other investments that helped performance
included aerospace stocks like Martin Marietta, which benefited from its merger
with Lockheed, and health care companies such as American Home Products and
Upjohn. The Fund also took advantage of relatively low prices in the retail
sector by investing in J.C. Penney and Allied Department Stores.
BARGAINS ABROAD OFFER GROWTH POTENTIAL: New positions were added in Australia,
Canada, and Europe to increase the Fund's foreign diversification. In
particular, we took advantage of some attractively priced water utility
4
<PAGE>
stocks in the United Kingdom that offered good dividend yields and low
price/earnings ratios, in keeping with the Fund's investment strategy.
LOOKING AHEAD: We will continue to closely monitor the markets in which the Fund
invests. As the current economic cycle matures, assets will be moved into
sectors likely to benefit from prevailing conditions. We will continue to seek
out securities that will provide shareholders with good relative value.
THE COLONIAL FUND INVESTMENT PERFORMANCE
Change in Value of $10,000 from 4/85 - 4/95
Based on Maximum Offering Price for Class A Shares
[GRAPHIC OMITTED]
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
CLASS A SHARES CLASS B SHARES
Objective Change 4/30/82 Inception 5/5/92
NAV MOP NAV w/CDSC
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 YEAR 10.07% 3.74% 9.14% 4.14%
- --------------------------------------------------------------------------
5 YEARS 11.48% 10.17% -- --
- --------------------------------------------------------------------------
10 YEARS 13.10% 12.43% -- --
- --------------------------------------------------------------------------
SINCE INCEPTION/
OBJECTIVE CHANGE 14.74% 14.22% 8.89% 8.03%
- --------------------------------------------------------------------------
</TABLE>
Past performance cannot predict future results. Return and value of an
investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. Net asset value (NAV) return does not
include sales charges or contingent deferred sales charges (CDSC). Maximum
offering price (MOP) return includes the maximum sales charge of 5.75%. The CDSC
return reflects the maximum charge of 5.00% for one year and 3.00% since
inception. Performance for different share classes will vary based on
differences in sales charges and fees associated with each class.
5
<PAGE>
INVESTMENT PORTFOLIO
APRIL 30, 1995 (UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON STOCKS - 83.5% COUNTRY SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
CONSTRUCTION - 0.8%
BUILDING CONSTRUCTION - 0.7%
Enterprise Jean Lefebvre SA Fr 7 $ 521
Koninklijke Volker Stevin NV Ne 74 4,495
Lennar Corp. 84 1,388
--------
6,404
--------
HEAVY CONSTRUCTION-NON BUILDING CONSTRUCTION - 0.1%
Cubiertas y Mzov SA Sp 20 1,264
--------
FINANCE, INSURANCE & REAL ESTATE - 15.5%
DEPOSITORY INSTITUTIONS - 4.7%
Banco de Santander SA Sp 18 655
Bank of Boston Corp. 56 1,876
Bank of Montreal Ca 398 8,148
Banque Nationale de Belgique Be 1 1,534
Canadian Imperial Bank of Commerce Ca 273 6,828
First Empire State Corp. 4 642
First Interstate BanCorp. 17 1,330
Great Western Financial Corp. 143 3,019
J.P. Morgan & Co., Inc. 93 6,090
National Australia Bank Ltd. Au 1,000 8,646
Nations Bank Corp. 24 1,210
Regions Financial Corp. 66 2,294
Toronto Dominion Bank Ca 50 733
--------
43,005
--------
HOLDING & OTHER INVESTMENT COMPANIES - 1.3%
Avalon Properties, Inc. 59 1,148
Amev NV Ne 99 5,211
Manufactured Home Communities 63 984
Sofina SA Be 8 4,084
--------
11,427
--------
INSURANCE AGENTS & BROKERS - 0.1%
Acordia, Inc. 30 934
INSURANCE CARRIERS - 8.3%
Ambac, Inc. 106 4,311
Aetna Life And Casualty Co. 137 7,809
American Bankers Insurance Group, Inc. 165 5,228
American General Corp. 38 1,267
Aon Corp. 105 3,853
Capitol American Financial Corp. 88 1,923
Cigna Corp. 239 17,379
Conseco, Inc. 117 5,062
</TABLE>
6
<PAGE>
Investment Portfolio/April 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONT. COUNTRY SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Lincoln National Corp. 73 $ 2,975
MBIA, Inc. 148 9,281
Orion Capital Corp. 20 719
Providian Corp. 41 1,413
Reliastar Financial Corp. 56 2,023
St. Paul Companies 134 6,425
Safeco Corp. 13 746
USLife Corp. 141 5,373
--------
75,787
--------
NONDEPOSITORY CREDIT INSTITUTIONS - 0.6%
Green Tree Financial Corp. 144 5,894
--------
REAL ESTATE - 0.0%
Societe Francaise d'Investissements
Immobiliers et de Gestion Fr 4 263
--------
SECURITY BROKERS & DEALERS - 0.5%
A.G. Edwards, Inc. 1 29
Alex Brown, Inc. 75 3,086
American Express Co. 50 1,738
--------
4,853
--------
MANUFACTURING - 45.2%
APPAREL - 0.3%
V F Corp. 62 3,111
--------
CHEMICALS - 5.2%
Akzo Nobel NV 63 3,677
American Home Products Corp. 60 4,628
Borden Chemicals & Plastic 115 1,942
Bristol-Myers Squibb Co. 19 1,263
Glaxo Wellcome PLC ADR UK 42 985
Marion Merrell Dow, Inc. 93 2,216
Rohm & Haas Co. 24 1,366
Sherwin-Williams Co. 34 1,226
Union Carbide Corp. 533 17,046
Upjohn Co. 343 12,418
Wellman, Inc. 30 821
--------
47,588
--------
ELECTRONIC & ELECTRICAL EQUIPMENT - 2.4%
Alcatel Alsthom Compagnie Generale
d'Electricite Fr 65 1,205
CTS Corp. 31 1,027
General Electric Co. 22 1,243
Helen of Troy Ltd. 17 285
Texas Instruments, Inc. 132 13,992
United Industrial Corp. 140 858
Whirlpool Corp. 51 2,792
--------
21,402
--------
</TABLE>
7
<PAGE>
Investment Portfolio/April 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONT. COUNTRY SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
MANUFACTURING - CONT.
FABRICATED METAL - 0.3%
Amcast Industrial Corp. 20 $ 408
Ball Corp. 50 1,713
Masco Corp. 34 867
--------
2,988
--------
FOOD & KINDRED PRODUCTS - 3.1%
Bongrain SA Fr (b) 225
CPC International 16 926
Golden Enterprises, Inc. 5 34
H J Heinz Co. 26 1,092
IBP, Inc. 271 10,020
International Multifoods Corp. 58 1,179
Korn-OG Foderstof Kompagniet AS De 9 1,652
Lancaster Colony Corp. 19 659
Pepsico, Inc. 29 1,195
Seagrams Co. Ltd. 431 11,694
--------
28,676
--------
FURNITURE & FIXTURES - 0.0%
Kimball International, Series B 4 106
--------
LEATHER - 0.4%
Justin Industries, Inc. 308 3,404
--------
MACHINERY & COMPUTER EQUIPMENT - 12.3%
Apple Computer, Inc. 353 13,502
Bucher Holdings AG Sz 6 3,619
Caterpillar, Inc. 60 3,510
Cummins Engine Co., Inc. 373 16,701
Diebold, Inc. 29 1,204
Deere & Co. 265 21,705
Dresser Industries, Inc. 499 10,913
Hewlett-Packard Co. 117 7,750
Kaydon Corp. 22 613
Seagate Technology, Inc. (a) 495 15,762
Sun Microsystems, Inc. (a) 175 6,994
Tandem Computers, Inc. (a) 532 6,783
Wynn's International, Inc. 129 2,989
--------
112,045
--------
MEASURING & ANALYZING INSTRUMENTS - 2.5%
Baxter International, Inc. 447 15,537
Emerson Electric Co. 22 1,493
Raytheon Co. 78 5,638
--------
22,668
--------
PAPER & PAPER MILLS - 1.8%
Kimberly Clark Corp. 24 1,336
Louisiana-Pacific Corp. 511 13,028
</TABLE>
8
<PAGE>
Investment Portfolio/April 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONT. COUNTRY SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Minnesota Mining & Manufacturing Co. 19 $ 1,109
Pope & Talbot, Inc. 32 525
Willamette Industries, Inc. 5 261
--------
16,259
--------
PETROLEUM REFINING - 2.1%
Amoco Corp. 62 4,036
British Petroleum Co. PLC UK 13 1,110
Elcor Corp. (a) 59 1,008
Exxon Corp. 36 2,507
Mobil Corp. 58 5,455
Texaco, Inc. 78 5,313
--------
19,429
--------
PRIMARY METAL - 0.1%
LTV Corp. (a) 25 357
Worthington Industries, Inc. 16 310
--------
667
--------
PRIMARY SMELTING - 0.7%
National Power PLC ADR UK 34 987
Phelps Dodge Corp. 98 5,527
--------
6,514
--------
PRINTING & PUBLISHING - 0.6%
CSS Industries, Inc.(a) 25 419
E.W. Scripps Co. 22 635
John H. Harland Co. 78 1,738
New York Times Co., Class A 36 810
Standard Register Co. 84 1,558
--------
5,160
--------
RUBBER & PLASTIC - 1.5%
Goodyear Tire & Rubber Co. 354 13,463
Myers Industries, Inc. 34 493
--------
13,956
--------
TEXTILE MILL PRODUCTS - 0.0%
Interface, Inc. 25 350
--------
TOBACCO PRODUCTS - 2.3%
American Brands, Inc. 529 21,412
--------
TRANSPORTATION EQUIPMENT - 9.6%
A.O. Smith Corp. 32 754
Clarcor, Inc. 16 340
Eaton Corp. 70 3,993
Ford Motor Co. 200 5,400
Harsco Corp. 20 933
Lockheed Martin Corp. 396 22,846
McDonnell Douglas Corp. 188 11,644
</TABLE>
9
<PAGE>
Investment Portfolio/April 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONT. COUNTRY SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
MANUFACTURING - CONT.
TRANSPORTATION EQUIPMENT - CONT.
Modine Manufacturing Co. 115 $ 3,889
Paccar, Inc. 74 3,385
Peugeot SA Fr 20 2,884
Rockwell International Corp. 25 1,091
Simpson Industries, Inc. 204 2,214
Societe Europeane de Propulsion SA Fr 2 111
Textron, Inc. 337 19,186
Thiokol Corp. 273 7,599
Toyota Motor Corp. 35 1,418
--------
87,687
--------
MINING & ENERGY - 0.7%
METAL MINING - 0.3%
Cleveland-Cliffs, Inc. 35 1,282
Cyprus Amax Minerals Co. 52 1,461
--------
2,743
--------
NONMETALLIC, EXCEPT FUELS - 0.4%
Potash Corp. of Saskatchewan, Inc. Ca 74 3,938
--------
RETAIL TRADE - 5.8%
APPAREL & ACCESSORY STORES - 0.1%
DEB Shops, Inc. 25 108
J. Baker, Inc. 74 921
--------
1,029
--------
GENERAL MERCHANDISE STORES - 5.3%
Dillard Department Stores Inc., Class A 340 8,785
J.C. Penney Co., Inc. 514 22,501
May Department Stores Co. 9 337
Sears, Roebuck & Co. 67 3,608
Venture Stores, Inc. 351 3,818
Waban, Inc. (a) 583 9,687
--------
48,736
--------
HOME FURNISHINGS & EQUIPMENT - 0.2%
Sun Television and Appliances 164 1,373
--------
MISCELLANEOUS RETAIL - 0.2%
Rite Aid Corp. 98 2,272
--------
SERVICES - 0.8%
ENGINEERING, ACCOUNTING, RESEARCH & MANAGEMENT - 0.3%
International-Muller NV Ne 36 2,323
--------
HOTELS, CAMPS & LODGING - 0.4%
Club Med, Inc. 56 1,595
</TABLE>
10
<PAGE>
Investment Portfolio/April 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONT. COUNTRY SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Harbour Centre Development HK 416 $ 481
New World Development Co., Ltd. HK 500 1,298
----------
3,374
----------
PERSONAL SERVICES - 0.1%
Service Corp. International 40 1,130
----------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 13.0%
AIR TRANSPORTATION - 0.1%
British Airways PLC UK 7 433
Federal Express Corp. (a) 10 694
----------
1,127
----------
COMMUNICATIONS - 5.4%
Ameritech Corp. 105 4,725
Bell Atlantic Corp. 80 4,390
GTE Corp. 36 1,225
NYNEX Corp. 457 18,676
Pacific Telesis Group, Inc. 60 1,856
Southern New England
Telecommunications Corp. 148 4,892
Southwestern Bell Corp. 262 11,578
Telefonos de Mexico SA Mx 79 2,375
----------
49,717
----------
ELECTRIC, GAS & SANITARY SERVICES - 1.1%
Gas y Electricidad SA Sp 224 10,379
----------
ELECTRIC SERVICES - 1.7%
Detroit Edison Co. 101 2,850
Empresa Nacional Electrica ADR Sp 23 1,066
NIPSCO Industries, Inc. 35 1,126
New England Electric System 57 1,720
Peco Energy Co. 105 2,691
Pinnacle West Capital Corp. 126 2,705
Unicom Corp. 80 2,100
Union Electrica Fenosa SA Sp 177 740
----------
14,998
----------
GAS SERVICES - 0.3%
Energen Corp. 78 1,707
Laclede Gas Co. 47 878
----------
2,585
----------
PIPELINES - 0.1%
Enron Global Power and Pipelines 53 1,272
----------
RAILROAD - 0.9%
CSX Corp. 68 5,414
Norfolk Southern Corp. 47 3,167
----------
8,581
----------
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/April 30, 1995
- ----------------------------------------------------------------------------------------
COMMON STOCKS - CONT. COUNTRY SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - CONT.
SANITARY SERVICES - 2.4%
North West Water PLC UK 1,096 $ 9,802
Northumbrian Water Group PLC UK 352 5,034
Severn Trent Water PLC UK 403 3,456
Yorkshire Water PLC UK 412 3,629
--------
21,921
--------
TRANSPORTATION SERVICES - 0.1%
Cross Harbour Tunnel Co. HK 307 583
--------
WATER TRANSPORTATION - 0.9%
American Presidents Cos. 292 6,787
Overseas Shipholding Group, Inc. 45 894
--------
7,681
--------
WHOLESALE TRADE - 1.7%
DURABLE GOODS - 1.6%
Beers N.V. (a) Ne 43 5,481
Handleman Co. 278 2,949
Pioneer Standard Electronics, Inc. 338 6,581
--------
15,011
--------
NONDURABLE GOODS - 0.1%
Nash-Finch Co. 60 948
--------
TOTAL COMMON STOCKS (cost of $653,920) 764,974
--------
</TABLE>
<TABLE>
<CAPTION>
MATURITIES
BONDS AND NOTES - 11.5% RATE FROM/TO PAR
- ----------------------------------------------------------------------------------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS - 11.2%
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GOVERNMENT AGENCIES - 7.2%
Federal National Mortgage Association
6.500% 2007-2009 $ 68,786 65,840
--------
GOVERNMENT OBLIGATIONS - 4.0%
U.S. Treasury Notes 7.875% 4/15/98 35,085 36,143
--------
TOTAL U.S. GOVERNMENT & AGENCY
OBLIGATIONS (cost of $105,665) 101,983
--------
CORPORATE FIXED-INCOME BONDS & NOTES - 0.2%
- ---------------------------------------------------------------------------
MANUFACTURING - 0.2%
CHEMICALS - 0.1%
Freeport-McMoRan (c) 08/05/06 2,700 999
--------
PRINTING & PUBLISHING - 0.1%
Time Warner, Inc. 8.750% 01/10/15 1,100 1,102
--------
</TABLE>
12
<PAGE>
<TABLE>
Investment Portfolio/April 30, 1995
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
TOTAL CORPORATE FIXED-INCOME
BONDS & NOTES (cost of $2,133) 2,101
----------
CORPORATE ADJUSTABLE RATE BONDS & NOTES - 0.1%
- ----------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC, GAS &
SANITARY SERVICES - 0.1%
PIPELINES
SFP Pipeline Holdings (d)
(cost of $720) 11.163% 08/15/10 600 $ 762
----------
TOTAL BONDS & NOTES (cost of $108,518) 104,846
----------
PREFERRED STOCKS - 0.1% SHARES
- -----------------------------------------------------------------------------------------
SERVICES - 0.1%
BUSINESS SERVICES
General Motors, $3.25 (cost of $1,148) 21 1,288
----------
WARRANTS (a) - 0.0% COUNTRY
- -----------------------------------------------------------------------------------------
MANUFACTURING - 0.0%
MACHINERY & COMPUTER EQUIPMENT
Bucher Holdings AG (expires 10/01/95)
(cost of $104) Sz 6 2
----------
TOTAL INVESTMENTS - 95.1% (cost of $763,690)(e) 871,110
----------
SHORT-TERM OBLIGATIONS - 4.2% PAR
- -----------------------------------------------------------------------------------------
Repurchase agreement with Bankers Trust
Securities Corp., dated 04/28/95, due 05/01/95
at 5.920% collateralized by U.S. Treasury
notes with various maturities to 1998, market
value $41,730 (repurchase proceeds $38,003) $ 37,984 37,984
----------
OTHER ASSETS & LIABILITIES, NET - 0.7% 6,559
- -----------------------------------------------------------------------------------------
NET ASSETS - 100.0% $ 915,653
- -----------------------------------------------------------------------------------------
NOTES TO INVESTMENT PORTFOLIO:
- -----------------------------------------------------------------------------------------
</TABLE>
(a) Non-income producing.
(b) Rounds to less than one.
(c) Zero coupon bond.
(d) Interest rates change quarterly. The rate listed is as of April 30, 1995.
(e) Cost for federal income tax purposes is $763,732.
13
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/April 30, 1995
- --------------------------------------------------------------------------
NOTES TO INVESTMENT PORTFOLIO - CONT.
- --------------------------------------------------------------------------
Summary of Securities by Country Country Value % of Total
- --------------------------------------------------------------------------
<S> <C> <C> <C>
United States $767,305 88.1
United Kingdom UK 25,436 2.9
Netherlands Ne 17,510 2
Spain Sp 14,104 1.6
Canada Ca 19,647 2.3
Australia Au 8,646 1
France Fr 5,209 0.6
Belgium Be 5,618 0.6
Switzerland Sz 3,621 0.4
Hong Kong HK 2,362 0.3
Denmark De 1,652 0.2
-------- ----------
$871,110 100.0
-------- ----------
</TABLE>
Certain securities are listed by country of underlying exposure but may
trade predominantly on other exchanges.
See notes to financial statements.
14
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
APRIL 30, 1995 (UNAUDITED)
(In thousands except for per share amounts and footnote)
<TABLE>
<S> <C> <C>
ASSETS
Investments at value (cost $763,690) $ 871,110
Short-term obligations 37,984
-------------
909,094
Cash held in foreign banks (cost $63) $ 63
Receivable for:
Investments sold 13,064
Dividends 2,011
Fund shares sold 1,368
Interest 520
Foreign tax reclaims 119
Other 86 17,231
------------ -------------
Total Assets 926,325
LIABILITIES
Payable for:
Investments bought 8,797
Fund shares repurchased 1,799
Accrued:
Deferred Trustees fees 7
Other 69
------------
Total Liabilities 10,672
-------------
NET ASSETS $ 915,653
-------------
Net asset value & redemption price per share -
Class A ($618,768/76,464) $8.09
-------------
Maximum offering price per share - Class A
($8.09/0.9425) $8.58 *
------------
Net asset value & offering price per share -
Class B ($296,885/36,747) $8.08
-------------
COMPOSITION OF NET ASSETS
Capital paid in $ 770,119
Undistributed net investment income 930
Accumulated net realized gain 37,189
Net unrealized appreciation (depreciation) on:
Investments 107,420
Foreign currency transactions (5)
-------------
$ 915,653
=============
*On sales of $50,000 or more the offering price is reduced.
See notes to financial statements.
</TABLE>
15
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
(in thousands)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividends $ 10,802
Interest 4,940
-------------
Total investment income (net of nonrebatable
foreign taxes withheld at source which
amounted to $235) 15,742
EXPENSES
Management fee $ 2,280
Service fee 957
Distribution fee - Class B 1,016
Transfer agent 1,224
Bookkeeping fee 150
Trustees fee 19
Custodian fee 32
Audit fee 22
Legal fee 6
Registration fee 45
Reports to shareholders 9
Other 30 5,790
------------ -------------
Net Investment Income 9,952
-------------
NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS
Net realized gain on:
Investments 36,898
Foreign currency transactions 28
------------
Net Realized Gain 36,926
Net unrealized appreciation (depreciation) during
the period on:
Investments 24,877
Foreign currency transactions (5)
------------
Net Unrealized Appreciation 24,872
-------------
Net Gain 61,798
-------------
Net Increase in Assets From Operations $ 71,750
=============
See notes to financial statements.
</TABLE>
16
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
<TABLE>
<CAPTION>
(Unaudited)
Six months ended Year ended
April 30 October 31
---------------- ----------
1995 1994
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income $ 9,952 $ 13,905
Net realized gain 36,926 50,974
Net unrealized appreciation (depreciation) 24,872 (61,930)
------------ -----------
Net Increase from Operations 71,750 2,949
Distributions:
From net investment income - Class A (7,461) (10,658)
From net realized gains - Class A (34,321) (15,320)
From net investment income - Class B (2,691) (2,687)
From net realized gains - Class B (16,631) (4,145)
------------ -----------
10,646 (29,861)
------------ -----------
Fund Share Transactions:
Receipts for shares sold - Class A 30,247 96,683
Receipts for shares issued in the acquisition
of Liberty Financial Growth and Income Fund 36,806
Value of distributions reinvested - Class A 37,486 22,779
Cost of shares repurchased - Class A (48,095) (62,378)
------------ -----------
56,444 57,084
------------ -----------
Receipts for shares sold - Class B 33,263 169,110
Value of distributions reinvested - Class B 18,207 6,421
Cost of shares repurchased - Class B (22,304) (28,224)
------------ -----------
29,166 147,307
------------ -----------
Net Increase from Fund Share Transactions 85,610 204,391
------------ -----------
Total Increase 96,256 174,530
NET ASSETS
Beginning of period 819,397 644,867
------------ -----------
End of period (including undistributed net
investment income of $930 and $1,133, respectively) $ 915,653 $ 819,397
============ ===========
NUMBER OF FUND SHARES
Sold - Class A 3,927 11,383
Issued in acquisition of Liberty Financial
Growth and Income Fund 4,735
Issued for distributions reinvested - Class A 5,166 2,821
Repurchased - Class A (6,259) (7,202)
------------ -----------
7,569 7,002
------------ -----------
Sold - Class B 4,316 20,623
Issued for distributions reinvested - Class B 2,512 794
Repurchased - Class B (2,904) (3,371)
------------ -----------
3,924 18,046
------------ -----------
Net Increase in Shares Outstanding 11,493 25,048
============ ===========
See notes to financial statements.
</TABLE>
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995 (UNAUDITED)
NOTE 1. INTERIM FINANCIAL STATEMENTS
In the opinion of management of The Colonial Fund (the Fund), a series of
Colonial Trust III, the accompanying financial statements contain all normal and
recurring adjustments necessary for the fair presentation of the financial
position of the Fund at April 30, 1995, and the results of its operations, the
changes in its net assets and the financial highlights for the six months then
ended.
NOTE 2. ACCOUNTING POLICIES
ORGANIZATION: The Fund is a Massachusetts business trust, registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end,
management investment company. The Fund may issue an unlimited number of shares.
The Fund offers Class A shares sold with a front-end sales charge and Class B
shares which are subject to an annual distribution fee and a contingent deferred
sales charge. Class B shares will convert to Class A shares when they have been
outstanding approximately eight years. The following significant accounting
policies are consistently followed by the Fund in the preparation of its
financial statements and conform to generally accepted accounting principles.
SECURITY VALUATION AND TRANSACTIONS: Equity securities are valued at the last
sale price or, in the case of unlisted or listed securities, for which there
were no sales during the day, at current quoted bid prices.
Debt securities are valued by a pricing service based upon market transactions
for normal, institutional-size trading units of similar securities. When
management deems it appropriate, an over-the-counter or exchange bid quotation
is used.
Forward currency contracts are valued based on the weighted value of the
exchange traded contracts with similar durations.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions which cannot be valued as set forth above are valued at fair
value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are purchased
or sold.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
The Fund may trade securities on other than normal settlement terms. This may
increase the risk if the other party to the transaction fails to deliver and
causes the Fund to subsequently invest at less advantageous prices.
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS: All income,
expenses (other than the Class B distribution fee), realized and unrealized
gains (losses) are allocated to each class proportionately on a daily basis for
purposes of determining the net asset value of each class.
18
<PAGE>
Notes to Financial Statements/April 30, 1995
- --------------------------------------------------------------------------------
Per share data was calculated using the average shares outstanding during the
period. In addition, Class B net investment income per share data reflects the
distribution fee per share applicable to Class B shares only.
Class B ratios are calculated by adjusting the expense and net investment income
ratios for the Fund for the entire period by the distribution fee applicable to
Class B shares only.
FEDERAL INCOME TAXES: Consistent with the Fund's policy to qualify as a
regulated investment company and to distribute all of its taxable income, no
federal income tax has been accrued.
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM: Interest income is recorded on the
accrual basis. Original issue discount is accreted to interest income over the
life of a security with a corresponding increase in the cost basis; premium and
market discount are not amortized or accreted.
DISTRIBUTIONS TO SHAREHOLDERS: Distributions to shareholders are recorded on
the ex-date.
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
FOREIGN CURRENCY TRANSACTIONS: The Fund has adopted Statement of Position 93-4,
Foreign Currency Accounting and Financial Statement Presentation for Investment
Companies. Accordingly, net realized and unrealized gains (losses) on foreign
currency transactions includes the fluctuation in exchange rates on gains and
losses between trade and settlement dates on securities transactions, gains and
losses arising from the disposition of foreign currency, and currency gains and
losses between the accrual and payment dates on dividends and interest income
and foreign withholding taxes.
The Fund does not distinguish that portion of gains and losses on investments
which is due to changes in foreign exchange rates from that which is due to
changes in market prices of the investments. Such fluctuations are included with
the net realized and unrealized gains and losses from investments.
FORWARD CURRENCY CONTRACTS: The Fund may enter into forward currency contracts
to purchase or sell foreign currencies at predetermined exchange rates in
connection with the settlement of purchases and sales of securities. The Fund
may also enter into forward currency contracts to hedge certain other foreign
currency denominated assets. The contracts are used to minimize the exposure to
foreign exchange rate fluctuations during the period between trade and
settlement date of the contracts. All contracts are marked-to-market daily,
resulting in unrealized gains or losses which become realized at the time the
forward currency contracts are closed or mature. Realized and unrealized gains
(losses) arising from such transactions are included in net realized and
unrealized gains (losses) on foreign currency transactions. Forward currency
contracts do not eliminate fluctuations in the prices of the Fund's portfolio
securities. While the maximum potential loss from such contracts
19
<PAGE>
Notes to Financial Statements/April 30, 1995
- --------------------------------------------------------------------------------
FOREIGN CURRENCY CONTRACTS - CONT.
is the aggregate face value in U.S. dollars at the time the contract was opened,
the actual exposure is typically limited to the change in value of the contract
(in U.S. dollars) over the period it remains open. Risks may also arise if
counterparties fail to perform their obligations under the contracts.
OTHER: Corporate actions are recorded on the ex-date (except for certain foreign
securities which are recorded as soon after ex-date as the Fund becomes aware of
such), net of nonrebatable tax withholdings. Where a high level of uncertainty
as to collection exists, income on securities is recorded net of all tax
withholdings with any rebates recorded when received.
The Fund's custodian takes possession through the federal book-entry system of
securities collateralizing repurchase agreements. Collateral is marked-to-
market daily to ensure that the market value of the underlying assets remains
sufficient to protect the Fund. The Fund may experience costs and delays in
liquidating the collateral if the issuer defaults or enters bankruptcy.
NOTE 3. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE: Colonial Management Associates, Inc. (the Adviser) is the
investment adviser of the Fund and furnishes accounting and other services and
office facilities for a monthly fee equal to 0.55% annually of the Fund's
average net assets.
BOOKKEEPING FEE: The Adviser provides bookkeeping and pricing services for
$27,000 per year plus 0.035% of the Fund's average net assets over $50 million.
TRANSFER AGENT: Colonial Investors Service Center, Inc., (the Transfer Agent),
an affiliate of the Adviser, provides shareholder services and receives a
monthly fee equal to 0.25% annually of the Fund's average net assets, and
receives a reimbursement for certain out of pocket expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES: The Adviser, through
Colonial Investment Services, Inc., (the Distributor), is the Fund's principal
underwriter. For the six months ended April 30, 1995, the Distributor retained
net underwriting discounts of $85,919 on sales of the Fund's Class A shares and
received contingent deferred sales charges (CDSC) of $493,293 on Class B share
redemptions.
The Fund has adopted a 12b-1 plan which requires the payment of a distribution
fee equal to 0.75% annually of the average net assets attributable to Class B
shares. The plan also requires the payment of a service fee to the Distributor
as follows:
<TABLE>
<CAPTION>
Value of shares Annual
outstanding on the 20th of Fee
each month which were issued Rate
- ------------------------------ ------
<S> <C>
Prior to April 1, 1989 0.15%
On or after April 1, 1989 0.25%
</TABLE>
20
<PAGE>
Notes to Financial Statements/April 30, 1995
- --------------------------------------------------------------------------------
The CDSC and the fees received from the 12b-1 plan are used principally as
repayment to the Distributor for amounts paid by the Distributor to dealers who
sold such shares.
OTHER: The Fund pays no compensation to its officers, all of whom are employees
of the Adviser.
The Fund's Trustees may participate in a deferred compensation plan which may be
terminated at any time. Obligations of the plan will be paid solely out of the
Fund's assets.
NOTE 4. PORTFOLIO INFORMATION
INVESTMENT ACTIVITY: During the six months ended April 30, 1995, purchases and
sales of investments, other than short-term obligations, were $293,228,922 and
$357,219,636, respectively, of which $4,583,079 and $4,753,009, respectively,
were U.S. government securities.
Unrealized appreciation (depreciation) at April 30, 1995, based on cost of
investments for federal income tax purposes was:
<TABLE>
<S> <C>
Gross unrealized appreciation $ 131,882,202
Gross unrealized depreciation (24,503,863)
---------------
Net unrealized appreciation $ 107,378,339
===============
</TABLE>
OTHER: There are certain additional risks involved when investing in foreign
securities that are not inherent with investments in domestic securities. These
risks may involve foreign currency exchange rate fluctuations, adverse political
and economic developments and the possible prevention of currency exchange or
other foreign governmental laws or restrictions.
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
NOTE 5. RESULTS OF SPECIAL SHAREHOLDERS MEETING
On February 15, 1995, a special meeting of shareholders was held and a new
Management Agreement between the Trust and Colonial Management Associates, Inc.
was approved that became effective upon the completion of the merger of the The
Colonial Group, Inc. and Apple Merger Corporation, a subsidiary of Liberty
Financial Companies, Inc. on March 24, 1995. Out of the shares of beneficial
interest outstanding on December 9, 1994, 74,003,431 voted for the new
Management Agreement, 1,075,852 voted against and 3,340,423 abstained. Of the
shares of beneficial interest outstanding that abstained 347,522, represented
broker non-votes.
21
<PAGE>
Notes to Financial Statements/April 30, 1995
- --------------------------------------------------------------------------------
NOTE 6. MERGER INFORMATION
On March 24, 1995, Liberty Financial Growth and Income Fund (LFGIF) was merged
into the Fund by a non-taxable exchange of 4,734,891 shares of the Fund (valued
at $36,806,337) for the 4,713,999 of LFGIF shares then outstanding. The assets
of LFGIF acquired included unrealized appreciation of $1,319,964. The aggregate
net assets of the Fund and LFGIF immediately after the merger were $879,529,274.
22
<PAGE>
FINANCIAL HIGHLIGHTS (a)
(Selected date for a share of each class outstanding through each period are as
follows:)
<TABLE>
<CAPTION>
(unaudited)
Six months ended
April 30 Year ended October 31
----------------------- ---------------------------------------------------------
1995 1994 1993(b)
Class A Class B Class A Class B Class A Class B
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value-
Beginning of period $8.060 $8.050 $8.410 $8.400 $7.390 $7.390
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.209 0.152 0.171 0.109 0.156 0.104
Net realized and
unrealized gain (loss) 0.429 0.457 (0.116) (0.111) 1.293 1.282
------ ------ ------ ------ ------ ------
Total from Investment
Operations 0.638 0.609 0.055 (0.002) 1.449 1.386
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net
investment income (0.107) (0.078) (0.160) (0.103) (0.147) (0.094)
From net
realized gains (0.501) (0.501) (0.245) (0.245) (0.282) (0.282)
------ ------ ------ ------ ------ ------
Total Distributions
Declared to Shareholders (0.608) (0.579) (0.405) (0.348) (0.429) (0.376)
------ ------ ------ ------ ------ ------
Net asset value-
End of period $8.090 $8.080 $8.060 $8.050 $8.410 $8.400
------ ------ ------ ------ ------ ------
Total return (d) 8.83%(e) 8.42%(e) 0.74% (0.04%) 20.21% 19.38%
------ ------ ------ ------ ------ ------
RATIOS TO AVERAGE NET ASSETS
Expenses 1.15%(f) 1.90%(f) 1.14% 1.89% 1.10% 1.85%
Net investment income 2.65%(f) 1.90%(f) 2.07% 1.32% 1.94% 1.19%
Portfolio turnover 64%(f) 64%(f) 54% 54% 14% 14%
Net assets at end
of period (000) $618,768 $296,885 $555,275 264,122 520,706 124,161
</TABLE>
(a) Per share data was calculated using average shares outstanding during the
period.
(b) All per share amounts have been restated to reflect the 3-for-1 stock split
effective December 10, 1993.
(c) Class B shares were initially offered on May 5, 1992. Per share amounts
reflect activity from that date.
(d) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or CDSC.
(e) Not annualized.
(f) Annualized.
23
<PAGE>
FINANCIAL HIGHLIGHTS (A) -CONTINUED
(Selected date for a share of each class outstanding throughout each period
are as follows:)
<TABLE>
<CAPTION>
Year ended October 31
-----------------------------------------------------
1992(B) 1991(B) 1990(B)
Class A Class B(c) Class A Class A
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value-
Beginning of period $ 7.050 $ 7.440 $5.700 $6.850
-------- ------- ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.173 0.052 0.218 0.256
Net realized and
unrealized gain (loss) 0.489 (0.044) 1.509 (0.979)
-------- ------- ------ ------
Total from Investment
Operations 0.662 0.008 1.727 (0.723)
-------- ------- ------ ------
LESS DISTIBUTIONS DECLARED TO SHAREHOLDERS:
From net
investment income (0.185) (0.058) (0.222) (0.276)
From net
realized gains (0.137) -- (0.155) (0.151)
-------- ------- ------ ------
Total Distributions
Declared to Shareholders (0.322) (0.058) (0.377) (0.427)
-------- ------- ------ ------
Net asset value-
End of period $ 7.390 $ 7.390 $7.050 $5.700
======== ======= ====== ======
Total return(d) 9.65% (0.31%)(e) 31.23% (11.17%)
======== ======= ====== ======
RATIOS TO AVERAGE NET ASSETS
Expenses 1.09% 1.84%(f) 1.06% 1.04%
Net investment income 2.52% 1.77%(f) 3.35% 4.05%
Portfolio turnover 37% 37%(f) 36% 41%
Net assets at end
of period (000) $413,228 $15,582 $366,808 $285,265
</TABLE>
(a) Per share data was calculated using average shares outstanding during the
period.
(b) All per share amounts have been restated to reflect the 3 for 1 stock split
effective December 10, 1993.
(c) Class B shares were initially offered on May 5, 1992. Per share amounts
reflect activity from that date.
(d) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or CDSC.
(e) Not annualized.
(f) Annualized.
24
<PAGE>
SHAREHOLDER SERVICES
TO MAKE INVESTING EASIER
Colonial has one of the most extensive selections of shareholder services
available. Your financial advisor can help you activate any of these services,
or call Colonial directly at 1-800-345-6611.
AFFORDABLE ADDITIONAL INVESTMENTS: Add to you account with as little as $50;
$25 for an IRA account.
FREE EXCHANGES*: Exchange all or part of your account into the same share class
of another Colonial fund, by phone or mail, as your needs change over time.
EAST ACCESS TO YOUR MONEY*: Make withdrawals from your account by phone, by
mail or, for certain funds, by check. We will mail a check (up to $50,000) if
your address hasn't changed within 60 days.
ONE-YEAR REINSTATEMENT PRIVILEGE: If you need access to your money, but then
choose to return it to Colonial within one year, you can reinvest in any
Colonial fund of the same share class without any penalty or sales charges.
FUNDAMATIC: Make periodic investments as low as $50 from your checking account
to your Colonial account.
SYSTEMATIC WITHDRAWAL PLAN (SWP): Receive monthly, quarterly, or semiannual
payments via check or bank transmission. There is a $5,000 account value
required, but no minimum for the payment amount. SWPs by check are processed on
the 10th of each month, including the April 1995 payment.
AUTOMATED DOLLAR COST AVERAGING: Transfer money on a monthly basis from any
Colonial fund with a balance of $5,000 into the same share class of up to four
other Colonial funds. Minimum for each transfer is $100.
LOW COST IRAS: Choose from a broad range of retirement plans, including IRAs.
* Redemptions and exchanges are made at the next determined net asset value
after the request is received by Colonial. Proceeds may be more or less than
your original cost. The exchange privilege may be terminated at any time.
Investors who purchase Class B or Class D shares, or $1 million or more of
Class A shares, may be subject to a contingent deferred sales charge.
25
<PAGE>
SHAREHOLDER COMMUNICATIONS
TO KEEP YOU INFORMED
To make recordkeeping easy and keep you up-to-date on the performance of your
investments, you can expect to receive the following information about your
Colonial account:
TRANSACTION CONFIRMATIONS: Each time you make a purchase, sale, or exchange,
you receive a confirmation statement within just a few days.
QUARTERLY STATEMENTS: Every three months, if any transactions are made that
affect your share balance, this statement reports on your account activity
during the quarter (including any reinvestment of dividends). This statement
also provides year-to-date information.
COLONIAL SHAREHOLDER NEWS: Mailed with your quarterly account statements, this
newsletter highlights timely investment strategies, portfolio manager
commentary, and shareholder service updates.
TAX FORMS AND YEAR-END TAX GUIDE: Easy-to-use forms and timely information are
designed to make tax reporting simpler. (Usually mailed in January).
AVERAGE COST BASIS STATEMENTS: If you sold or exchanged shares during the year,
this statement may help you calculate your gain/loss for tax purposes. (Usually
mailed in February).
26
<PAGE>
HOW TO REACH COLONIAL
BY PHONE OR BY MAIL
BY TELEPHONE
COLONIAL CUSTOMER CONNECTION - 1-800-345-6611
For 24-hour account information, call from your touch-tone phone. (Rotary
callers will be automatically connected to a representative during business
hours). A recorded message will guide you through the menu:
<TABLE>
<S> <C>
For fund prices, dividends, and capital gains information....... press 1
For account information......................................... press 2
To speak to a Colonial representative........................... press 3
For yield and total return information.......................... press 4
For duplicate statements or new supply of checks................ press 5
To order duplicate tax forms and year-end statements............ press 6
(February through May)
To review your options at any time during your call............. press *
</TABLE>
To speak with a shareholder services representative about your account, call
Monday to Friday, 8am to 8pm ET, and Saturdays from February through mid-April,
10am to 2pm ET.
COLONIAL TELEPHONE TRANSACTION DEPARTMENT - 1-800-422-3737
To purchase, exchange, or sell shares by telephone, call Monday to Friday, 9am
to 8pm ET. Transactions received after 4pm will receive the next business day's
closing price.
COLONIAL LITERATURE DEPARTMENT - 1-800-248-2828
To request literature on any Colonial fund, call Monday to Friday, 8:30am to
6:30pm ET.
BY MAIL
COLONIAL INVESTORS SERVICE CENTER, INC.
P.O. BOX 1722
BOSTON, MA 02105-1722
27
<PAGE>
[LOGO COLONIAL MUTUAL FUNDS]
Earning Your Trust for
More Than 60 Years
TRUSTEES
ROBERT J. BIRNBAUM
Trustee (formerly Special Counsel, Dechert, Price & Rhoades; President and Chief
Operating Officer, New York Stock Exchange, Inc.)
TOM BLEASDALE
Trustee (formerly Chairman of the Board and Chief Executive Officer, Shore Bank
& Trust Company)
LORA S. COLLINS
Attorney, Kramer, Levin, Naftalis, Nessen, Kamin & Frankel
JAMES E. GRINNELL
Private Investor
WILLIAM D. IRELAND, JR.
Trustee (formerly Chairman of the Board, Bank of New England -- Worcester)
RICHARD W. LOWRY
Private Investor
WILLIAM E. MAYER
Dean, College of Business and Management, University of Maryland (formerly Dean,
Simon Graduate School of Business, University of Rochester; Chairman and Chief
Executive Officer, C.S. First Boston Merchant Bank; and President and Chief
Executive Officer, The First Boston Corporation)
JOHN A. MCNEICE, JR.
Chairman of the Board and Director, The Colonial Group, Inc. and Colonial
Management Associates, Inc. (formerly Chief Executive Officer, The Colonial
Group, Inc. and Colonial Management Associates, Inc.)
JAMES L. MOODY, JR.
Chairman of the Board, Hannaford Bros. Co. (formerly Chief Executive Officer,
Hannaford Bros. Co.)
JOHN J. NEUHAUSER
Dean, Boston College School of Management
GEORGE L. SHINN
Financial Consultant (formerly Chairman, Chief Executive Officer and Consultant,
The First Boston Corporation)
ROBERT L. SULLIVAN
Management Consultant
SINCLAIR WEEKS, JR.
Chairman of the Board, Reed & Barton Corporation
COLONIAL INVESTMENT SERVICES, INC. (C)1995
One Financial Center, Boston, Massachusetts 02111-2621, 617-426-3750
TF - 03/975A - 0495
